The liver is the only solid organ that uses regenerative mechanisms to ensure that the liver-to-bodyweight ratio is always at 100% of what is required for body homeostasis. Other solid organs (such as the lungs, kidneys and pancreas) adjust to tissue loss but do not return to 100% of normal. The current state of knowledge of the regenerative pathways that underlie this 'hepatostat' will be presented in this Review. Liver regeneration from acute injury is always beneficial and has been extensively studied. Experimental models that involve partial hepatectomy or chemical injury have revealed extracellular and intracellular signalling pathways that are used to return the liver to equivalent size and weight to those prior to injury. On the other hand, chronic loss of hepatocytes, which can occur in chronic liver disease of any aetiology, often has adverse consequences, including fibrosis, cirrhosis and liver neoplasia. The regenerative activities of hepatocytes and cholangiocytes are typically characterized by phenotypic fidelity. However, when regeneration of one of the two cell types fails, hepatocytes and cholangiocytes function as facultative stem cells and transdifferentiate into each other to restore normal liver structure. Liver recolonization models have demonstrated that hepatocytes have an unlimited regenerative capacity. However, in normal liver, cell turnover is very slow. All zones of the resting liver lobules have been equally implicated in the maintenance of hepatocyte and cholangiocyte populations in normal liver.